LESSON 1

1.1 CHARACTERISTICS OF A SMALL BUSINESS

- Is independently owned and operated

- Has a capital contribution from a limited number of individuals

- Would usually operate in a local area

- Would probably not be dominant in its field of operation

1.2 CRITERIA WHEN DECIDING ON SIZE:

  1. Capital employed
  2. No. of employees
  3. Market share
  4. Sales revenue
  5. Profit
  6. The physical size of the plant
  7. No of divisions

1.3 OWNERSHIP & MANAGEMENT:

Founder & Owner

1.4 PLANNING & CONTROL:

- Jobs are not so rigidly defined

- More flexibility between jobs

- Less formality

- Quicker decision making

- Rules and procedures less rigid

1.5 MOTIVATION:

- Wider range of duties

- Greater satisfaction

- Pay & reward systems

- More personalized

- Closer identity with the organization

1.6 ADVANTAGES:

- Can be easily set up and dissolved

- Greater profit (not shared)

- Flexibility to act; do not need approval

- Lean with a small staff (permanent)

- Fewer overhead cost

- Staff work longer hours without extra pay

1.7 DISADVANTAGES:

- Poor management

- Less easy to acquire loans

- Competition from large firms leads to being forced out of business

- No room for promotions

1.8 WAYS IN WHICH GOVERNMENT CAN HELP:

- Low-interest loans (NEDCO)

- Provide infrastructure – even factory shells

- Tax breaks – import duty/corporate tax

- Training & Development

 

 

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Cherise Castle-Blugh is the author of The Timely Entrepreneur Series and the Director of Entrepreneur Services at The Timely Entrepreneur®. She has been working to grow the Trinidad and Tobago Entrepreneurial community, creating resources and events to support entrepreneurs.